BTC: 5 & 13W EMA momentum
Merry Christmas! A short update from my side as I yet again found a great momentum indicator which are the 5 (yellow) & 13 (red) week EMA. If we keep it simple we can conclude the following when looking at these EMA's:
- 5W EMA above 13W EMA: bullish momentum
- 13W EMA above 5W EMA: bearish momentum
Ok, that's logical but there's more. These EMA's don't cross often and when they do it usually indicates the market is turning from bullish to bearish or vice versa. However there have been some "fake outs" using these crosses as means of momentum. One of those was the pandemic dump in March 2020, which is a one of a lifetime event and shouldn't be regarded as a true trend. So if we want to find a true trend with these indicators, I established the following rule:
If the 5 week EMA is above the 13 week EMA for more than 8 weeks AND it crosses bearish for 4 week or more, this indicated a prolonged period of bearish price action looking at the all time price history of Bitcoin.
This happened in August 2011, February 2014, January 2018, September 2019 and May 2021.
We have 1 week left to validate the same scenario for Bitcoin right now. If Bitcoin manages to regain 52,5K and hold it as support for the monthly close in January, we can invalidate a short term bearish momentum. However if Bitcoin does not manage to do so and if history is any indication (which sometime it is not), we could expect a prolonged period of bearish price action.
Across the board, the crypto markets scream price manipulation with Tether and Bitfinex in the epicenter of it. There will be no real institutional adoption as long as cowboys with a crypto money printer run these markets with their own funds, exchanges and as market makers; effectively having a seat at all tables or better said: winning with every move; to the downside or upside. As much as the internet was once a place built for freedom and was turned into centralised power, crypto has suffered the same faith. Decentralisation is a noble cause and a necessity but with big players controlling the market its nothing less than an illusion.
I guess any system that is invented in this world will always reflect the society it is built in.
IMPORTANT: this is not financial advice, trade or invest based on your own risk and research.
- 5W EMA above 13W EMA: bullish momentum
- 13W EMA above 5W EMA: bearish momentum
Ok, that's logical but there's more. These EMA's don't cross often and when they do it usually indicates the market is turning from bullish to bearish or vice versa. However there have been some "fake outs" using these crosses as means of momentum. One of those was the pandemic dump in March 2020, which is a one of a lifetime event and shouldn't be regarded as a true trend. So if we want to find a true trend with these indicators, I established the following rule:
If the 5 week EMA is above the 13 week EMA for more than 8 weeks AND it crosses bearish for 4 week or more, this indicated a prolonged period of bearish price action looking at the all time price history of Bitcoin.
This happened in August 2011, February 2014, January 2018, September 2019 and May 2021.
We have 1 week left to validate the same scenario for Bitcoin right now. If Bitcoin manages to regain 52,5K and hold it as support for the monthly close in January, we can invalidate a short term bearish momentum. However if Bitcoin does not manage to do so and if history is any indication (which sometime it is not), we could expect a prolonged period of bearish price action.
Across the board, the crypto markets scream price manipulation with Tether and Bitfinex in the epicenter of it. There will be no real institutional adoption as long as cowboys with a crypto money printer run these markets with their own funds, exchanges and as market makers; effectively having a seat at all tables or better said: winning with every move; to the downside or upside. As much as the internet was once a place built for freedom and was turned into centralised power, crypto has suffered the same faith. Decentralisation is a noble cause and a necessity but with big players controlling the market its nothing less than an illusion.
I guess any system that is invented in this world will always reflect the society it is built in.
IMPORTANT: this is not financial advice, trade or invest based on your own risk and research.
Important update on Twitter on 10x Club, a weekly newsletter curated by me containing research & analytics on the crypto market & the amazing opportunities during the bear market - Check my Twitter or website link below:
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